Register for tax self assessment for current tax year (you have until end Jan 2016 to complete it)Keep receipts and log of any maintenance costs, insurance , fees, mortgage interest, allowable expenses etcMake sure the agent is ARLA registered and uses an official deposit scheme. Be specific about what you expect them to do for the fee in terms of vetting tenants , contract, inventory, checks, maintenance (you can set a limit for self authorising repairs), gas certificate, how deductions are made before the net rent payment passes to you and how long it takes to appear in your account.Ask what happens is tenant doesn't pay? Make sure you can still afford to run the house empty or with non paying tenant for a few monthsIf leaving any furnishings (including curtains, beds , sofas) make sure the fabric complies to the fire retardancy regulations

quite a lot - this is a serious business and not really a matter for a few quick tips.

first, find a decent agent because ANYONE can call themselves a letting agent. Make sure they belong to one of the associations. And then check and chase them on everything because it all still comes down to you.

to answer your immediate questions:- keep records, register for self-assessment, declare on tax return- you need buildings and landlords contents insurance, malicious damage insurance (not in all policies including some big names), legal expenses insurance (in case you get a rogue that won't pay and won't leave). Rent guarantee is also a good idea.- deposit must be protected and prescribed information given to the tenant- gas safe certs- electrical check a good idea- make sure everything works and nothing leaks. Leave it as you would like to live in it.- leave instructions- be on call to fix things, have some kind of cover to do it if you can't- don't expect to make a lot of money.- dissociate from it. Your house, their home.

Thanks for the fast replies. Lots to look into. I know it's a huge thing which is why we want to research.

I don't think we will make much money once the insurance etc has been paid. It's more of a nest egg to kind of forget about. Well that's the plan ha.

I've read that the tax return is 20% on any profit. So we are looking at rental income of £600 per month. Mortgage will be £488 a month plus the 10% fee the agent wants etc so anything left is that the 'profit' so to speak?

tax is the same as on any other income; you have your tax-free allowance and then it is 20% on the first whatever, going up to the higher rate bands. It is lumped in with all your other incomes on the return.

Give some thought to how you will cope if the tenant doesn't pay the rent and you still have to pay the mortgage / what you will do if the property is empty for a long time between lets / you have to evict / a tenant trashes the house/

You really need to protect yourself from the possible worst case scenarios.

I've checked with the mortgage company and the rate stays the same for 6 months then it goes up by 1.5% which will take it to £488 a month. We have some reserves for if we have a gap inbetween tennents. It's the tax side I find confusing and really don't want to get in a pickle with that. So if I deduct the mortgage £488 from the rent charge £600 I'm left with £112 £60 will go to the agents for their 10% charge from the £600 rent so I'm left with £52 each month and will get taxed 20% on that the very few pounds left will can go towards the insurance.

You will probably make a loss short term tbh. There is a space on the tax return for the rental income and allowable expenses/deductions ( see here ), so it is calculated for you. Is the mortgage interest only, as any capital repayments are not allowable. If the house is in both your names you can split the income and costs 50:50 but both would need to register for and submit a return. You say it is a nest egg but bear in mind you will also eventually become liable for CGT on the profit should you sell in the future.

A mortgage payment is in two parts: part capital (which goes to paying off the lmortgage) and part interest. Only the interest is allowable for tax purposes.

So, as you are in a repayment mortgage, you won't be able to deduct the full £488...on the the premise that roughly 50 percent of the payment is tax, you would deducted 244 from your rental profits, so at £600 per month, less agents fees (say 10 percent plus vat so £72), less mortgage interest of £244, your taxable profit per month would be £284, tax on 20 percent of that would be £56.80 per month.

Your mortgagee offer from the lender should detail how much of £488 is interest and how much capital repayment. Depending on your terms (is it fixed or variable rate) the interest payment may vary over time ie. base rate rise , if interest rates change. When you enter the mortgage amount on the tax return it is only the interest paid during that tax year which is included.

To add to the above as far as I am aware you can not deduct the letting agents fees - would be very happy to be corrected on this as I'm just filling out my self assessment!I think you can deduct mortgage interest, repairs/actual maintenance or some sort of % of something to cover ongoing repairs (don't ask me what!) also, possibly the insurance payments. Your best hope is to try to search on the HMRC website and call them and ask about things you don't understand.The 'profit' you make is taxed along with your other income so if you are a higher rate tax payer it will be taxed at 40 or 50% I'm afraid!

The link I gave below lists allowable expenses . iirc agent fees is ok and most costs associated directly with the letting of the property such as insurance. 10% allowance is only for furnished accommodation.

Join the NLA. It's tax deductible, & will keep you up to date with every change of legislation that the government come up with on a whim. The free legal advice line is great. And you can become an accredited LL online by doing their online tests.

Don't just assume that you LA knows wha they are doing. They are employed by you, and acting on your behalf, but if they cock up some paperwork ultimately you are liable.

Dont rely on your agent for anything - unfortunately they are not experts in any area, even in finding a 'suitable' tenant. IME they just want to give you anyone, so always check, how many people will actually be living at the house, what exactly their jobs are, whether they've rented before, how old, no pets, why they want your house, for how long? You are trying to get a responsible, long term tenant and getting the right tenant is critical to whether, or not, this will work.

You say above that you're left with £52 a month - but with the correct tax deduction you are just about breaking even. You will have to fund repairs, gas safety, voids, tenant find fees, 6 monthly inspections - assuming your tenant stays 12 months you're probably going to have to put £1000pa in. With interest rates estimated to return to 5% in a couple of years it could be double that.